Last week, changes in a few economic indicators, such as the gross domestic product and consumer confidence, point to better days ahead for the U.S. economy and for the trucking industry.
As the American Trucking Associations' Chief Economist Bob Costello pointed out in his Weekly Economic Recap, the real gross domestic product gained an annualized rate of 5.7 percent during the fourth quarter of 2009. This is better than analysts' forecast of 4.7 percent and ATA's forecast of 5.1 percent.
"Still, we believe that the fourth quarter will be the outlier and that GDP will come down to earth starting this quarter, growing 2.5 percent, and remain at or below that level for the rest of the year," Costello said in his Recap.
In the Bureau of Economic Analysis' GDP report, there was a 2 percent boost in personal consumption, a 28.1 percent increase in exported goods, and 13.3 percent growth in business investment on equipment and software. According to the ATA, 3.4 percentage points of the growth in GDP came from a smaller decrease in inventories.
Consumer confidence was also up in January, and new manufacturing orders for durable goods, which are products with a useable life of at least three years, gained 0.3 percent in December.
The Federal Reserve also chose to leave the federal funds rate where it is, in the 0 to 0.25 percent range. The federal funds rate is the interest rate with which the Fed implements monetary policy. With subdued inflation and stable inflation expectations, the Fed will likely keep the federal funds rate low for an extended period, according to Costello. ATA expects the Fed to start raising the rate in the third quarter and believes it will hit 2.5 percent by the end of 2011.
As the American Trucking Associations' Chief Economist Bob Costello pointed out in his Weekly Economic Recap, the real gross domestic product gained an annualized rate of 5.7 percent during the fourth quarter of 2009. This is better than analysts' forecast of 4.7 percent and ATA's forecast of 5.1 percent.
"Still, we believe that the fourth quarter will be the outlier and that GDP will come down to earth starting this quarter, growing 2.5 percent, and remain at or below that level for the rest of the year," Costello said in his Recap.
In the Bureau of Economic Analysis' GDP report, there was a 2 percent boost in personal consumption, a 28.1 percent increase in exported goods, and 13.3 percent growth in business investment on equipment and software. According to the ATA, 3.4 percentage points of the growth in GDP came from a smaller decrease in inventories.
Consumer confidence was also up in January, and new manufacturing orders for durable goods, which are products with a useable life of at least three years, gained 0.3 percent in December.
The Federal Reserve also chose to leave the federal funds rate where it is, in the 0 to 0.25 percent range. The federal funds rate is the interest rate with which the Fed implements monetary policy. With subdued inflation and stable inflation expectations, the Fed will likely keep the federal funds rate low for an extended period, according to Costello. ATA expects the Fed to start raising the rate in the third quarter and believes it will hit 2.5 percent by the end of 2011.
Read more about
Economy
media brand
0 Comments
See all comments